Congress Introduces Bill to Combat BDS Worldwide

November 18, 2016 | Policy Brief

Congress Introduces Bill to Combat BDS Worldwide

Congress introduced the Protecting Israel Against Economic Discrimination Act this week to combat efforts at the UN to blacklist companies doing business with Israel, and calls on the U.S. Export-Import Bank to consider denying applicant companies engaged in politically-motivated boycotts of the country. The legislation – introduced by Representatives Peter Roskam (R-IL) and Juan Vargas (D-CA) – is the House companion of a Senate bill introduced in September by Senators Rob Portman (R-OH) and Ben Cardin (D-MD).

The bill comes in response to efforts at the UN Human Rights Council to create a database of companies doing business beyond Israel’s 1949 armistice lines, including all parts of East Jerusalem. Such a blacklist would imperil the jobs of thousands of Israelis and Palestinians who work in 15 industrial zones in the West Bank. It would also jeopardize Qualifying Industrial Zones set up to allow Jordan, the Palestinian Authority, and Egypt to take advantage of the Israel-U.S. Free Trade Agreement by partially sourcing their products in the Jewish state.

Blacklisting companies doing business over the Green Line has long been the goal of the Boycott, Divestment, and Sanctions (BDS) movement, which has thus far had only limited success in forcing companies out of Israel or the West Bank. Its few successes, however, have come at painful costs: Pressure applied to the popular beverage manufacturer SodaStream to move its factory out of the West Bank last year resulted in 500 Palestinians losing their jobs.

The bill introduced this week would amend the Export Administration Act (EAA), signed in 1979 and maintained through executive authority under the International Emergency Economic Powers Act. The law allows the president to limit the export of sensitive technologies and dual-use items. The EAA also charges the Commerce Department with enforcing anti-boycott provisions which could make it illegal to do business with countries boycotting U.S. allies.

The law has been effective. Only Iran, Syria, and Lebanon now publically push for boycotts of Israel at the state level. Instead, such state-sponsored efforts are typically conducted through NGOs and international bodies. This week’s legislation recognizes this reality, and seeks to combat efforts at the UN to compile a blacklist of companies doing business in Israel.

The new bill also amends the Export-Import Bank Act of 1945 and would prohibit the bank from using dollars to finance companies engaged in politically-motivated boycotts. Specifically, the bank would be prohibited from providing financing to entities attempting to penalize or restrict commercial activity with Israel.

These measures do not directly impede NGOs from engaging in BDS, but they do begin to form a protective shield for the U.S. and its allies against politically-motivated boycotts. In countering economic warfare against Washington and its allies, they are a step in the right direction.

Tyler Stapleton is deputy director for congressional relations at the Foundation for Defense of Democracies